New Orleans City Hall continues to flout Louisiana Constitution: James Gill

Several of the characters who run City Hall ought to be locked up. So, you say, what else is new? Right. But they're really asking for it this time. They have refused for years to abide by the law, and it has become obvious that only the threat of a spell in the pokey will make them mend their ways.

Ted Jackson / The Times-PicayuneIn imposing a fee on delinquent taxpapers, New Orleans Mayor Mitch Landrieu is continuing a policy practiced by former mayors C. Ray Nagin and Marc Morial, a policy the Louisiana Supreme Court has declared unconstitutional. A lawyer has asked that the city be held in contempt of court.

That threat has materialized with a petition to have them held in contempt of the state Supreme Court. We will probably not see officials trooping off to the slammer, however. Having no conceivable defense, they have little choice but to capitulate and promise to quit a scam that has robbed taxpayers of countless millions.

It began in 1998 when the City Council passed an ordinance cracking down on property owners who failed to pay taxes on time. It imposed a 3 percent penalty, rising by 1 percent a month, plus a 30 percent fee for a law firm hired to churn out boilerplate letters dunning the delinquent.

That was some plum contract. For the task of collecting arrears, the city chose the Linebarger firm from Texas, which would share the moolah with a group of New Orleans businessmen. As luck would have it, those businessmen were all friends and supporters of then-Mayor Marc Morial.

By 2002 New Orleans lawyer Henry Klein and others had begun pointing out in letters to City Hall that its sweetheart deal violated the state Constitution, which says government's only recourse if taxes are unpaid is to seize the property and put it up for sale. Government can charge interest on arrears, but penalties and fees are verboten.

With Ray Nagin installed as mayor, the Morial crowd got the heave-ho but not because of any sudden respect for the rule of law. The system remained in place, with the city adjusting its penalty to 10 percent, and the collection fee to 9 1/2 percent.

Nagin decided that the firm best qualified to earn the collection fee was Strategic Alliance Partners of New Orleans. Nagin has taken his share of brickbats, but his prescience is not to be denied. He recognized the superior talents of Strategic Alliance even before it came into existence. The company was incorporated the day after Nagin signed the contract in 2005.

It was three years before the state Supreme Court took up a challenge to the fees and penalties, but, when it did, the city took a shellacking. The plain wording of the Constitution had been flouted, the justices unanimously ruled.

The city's defiance since then has been breathtaking. A couple of months after the Supreme Court ruling, Nagin renewed the Strategic Alliance contract, and Mitch Landrieu's administration has kept it in place. The suckers have continued to pay up.

Last year, however, Klein asked the Supreme Court to hold the city in contempt for including fees and penalties in a bill one of his clients had received for $928,000. The case was remanded for a hearing in district court, but the city declined the engagement, agreeing to waive not just the illegal charges but interest too. That meant lopping $611,000 off the bill.

Thus did the city admit it did not have a leg to stand on, but it continues to work the same old dodge, presumably confident that few taxpayers are abreast of the jurisprudence. Klein now asks the courts to make officials quit with the illicit charges altogether and pay for their impudence.

An administration spokesman says merely that Klein's claims are "completely unsubstantiated," which is pretty lame considering that another challenge to the fees has just been upheld in district court.

It may be that tax sales are not the most efficient way to ensure property tax bills are settled, and a case could be made that the law should give City Hall more leverage over deadbeats. It just doesn't.

The law does, however, say that contempt of court may be punished by imprisonment. Contempt does not get any more blatant than this, and, unless officials are as stupid as they are arrogant, they will throw in the towel once again before they get hauled in front of a judge.